4 Stocks Spiking on Unusual Volume - views

WINDERMERE, Fla. (Stockpickr) -- Professional traders running mutual funds and hedge funds don’t just look at a stock’s price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by “superinvestors.”

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it’s always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

Chesapeake Energy (CHK) is a natural gas and oil exploration and production company engaged in the exploration, development and acquisition of properties for the production of natural gas and crude oil from underground reservoirs. This stock closed up 6% at $20.11 on Wednesday.

Wednesday's Volume: 67.30 million

Average Volume: 13.47 million

Volume % Change: 430%

Shares of CHK ripped higher after the company announced the retirement of Aubrey McClendon, its co-founder and CEO.

From a technical perspective, CHK gapped higher here with heavy upside volume. This stock has been uptrending strong for the last month and change, with shares moving higher from its low of $16.15 to its intraday high of $21.20. During that move, shares of CHK have been consistently making higher lows and higher highs, which is bullish technical price action.

That move has now pushed shares of CHK within range of triggering a major breakout trade. That trade will hit if CHK manages to clear some near-term overhead resistance at $21.55 with high volume. At last check, CHK closed off its intraday high but still above its daily low of $19.90.

Traders should now look for long-biased trades in CHK as long as it’s trending above today’s low of $19.90, and then once it sustains a move or close above $21.55 with volume that hits near or above 13.47 million shares. If that breakout triggers soon, then CHK will set up to re-test or possibly take out its next major overhead resistance levels at $24 to $25.72.

Silgan

Silgan (SLGN) is a manufacturer of metal and plastic consumer goods packaging products. This stock closed up 1.7% at $42.75 on Wednesday.

Wednesday's Volume: 1.06 million

Average Volume: 234,736

Volume % Change: 318%

Shares of SLGN moved higher after the company reported record adjusted net income per share of $2.70 and record free cash flow per share that doubled to $4.35.

From a technical perspective, SLGN trended higher and back above its 200-day moving average of $42.65 with above-average volume. This move briefly pushed SLGN into breakout territory, since the stock cleared its 50-day moving average at $42.98 and since it took out some near-term overhead resistance levels at $43.30 to $43.34.

SLGN closed below all of those levels but above its daily low of $42.01. Shares of SLGN are starting to move within range of triggering another breakout trade. That trade will hit if SLGN manages to take out today’s high of $44.34 and then some more overhead resistance levels at $45.05 to $45.07 with high volume.

Traders should now look for long-biased trades in SLGN as long as it’s trending above its 200-day at $42.65, and then once it sustains a move or close above those breakout levels with volume that hits near or above 234,736 shares. If that breakout triggers soon, then SLGN will set up to re-test or possibly take out its next major overhead resistance level at $46.

Approach Resources

Approach Resources (AREX) is an independent energy company engaged in the exploration, development, production and acquisition of unconventional natural gas and oil properties in the U.S. and British Columbia. This stock closed up 3.5% at $26.61 on Wednesday.

Wednesday's Volume: 1.55 million

Average Volume: 534,574

Volume % Change: 150%

From a technical perspective, AREX bounced higher here right off some near-term support at $25.36 with above-average volume. This move has started to push shares of AREX into breakout territory, since the stock has flirted with some near-term overhead resistance levels at $26.72 to $27. At last check, AREX has hit an intraday high of $27.59 and volume finished well above its three-month average action of 534,574 shares. Shares of AREX are now moving within range of triggering another major breakout trade. That trade will hit if AREX manages to take out its 200-day moving average of $27.66 with high volume.

Traders should now look for long-biased trades in AREX as long as it’s trending above today’s low of $26.37 or above $25.36, and then once it sustains a move or close above its 200-day at $27.66 with volume that hits near or above 534,574 shares. If that breakout hits soon, thendddd AREX will set up to re-test or possibly take out its next major overhead resistance levels at $29.06 to $30.76.

SodaStream International

SodaStream International (SODA) is engaged in developing, manufacturing and marketing home beverage carbonation systems and related products. This stock closed flat at $50.53 on Wednesday.

Wednesday's Volume: 1.55 million

Average Volume: 1.10 million

Volume % Change: 50%

From a technical perspective, SODA spiked higher here right above some near-term support at $49.44 with above-average volume. This stock has been uptrending strong for the last three months, with shares soaring from its low of $33.15 to its recent high of $53.99. During that move, shares of SODA have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed SODA within range of triggering a near-term breakout trade. That trade will hit if SODA manages to take out some near-term overhead resistance at $53.99 with high volume.

Traders should now look for long-biased trades in SODA as long as it’s trending above some key near-term support levels at $49.44 to $48, and then once it sustains a move or close above $53.99 with volume that hits near or above 1.10 million shares. If that breakout triggers soon, then SODA will set up to re-test or possibly take out its next major overhead resistance levels at $60 to $63.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.